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The trailing P/E ratio on the S&P 500 (SPY) has creeped up to 15.25 from just above 13 late...

The trailing P/E ratio on the S&P 500 (SPY) has creeped up to 15.25 from just above 13 late last spring, writes Bespoke. There's nothing unusual about rising valuations during rallies, they say, but keep it on your radar. Contributing most of late to rising multiples have been Staples (XLP) and Discretionary (XLY), but dividend favorites Telecoms (XTL) and Utilities (XLU) continue to trade at nosebleed (for them) valuations.
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Comments (3)
  • getgl
    , contributor
    Comments (619) | Send Message
     
    The XLU had my attention and now thanks to the tip, I've added paying attention to the XTL as well. Both make me nervous about a market correction around the bend.
    12 Mar 2013, 10:00 AM Reply Like
  • User 520649
    , contributor
    Comment (1) | Send Message
     
    Where can one find historic P/E ratios for ETFs?
    13 Mar 2013, 06:10 AM Reply Like
  • tr4head
    , contributor
    Comments (330) | Send Message
     
    XLU has a much better yield than S&P/DOW (almost a 4% yield) and similar trailing PE (but close). Still, I think you have your risk/reward ratio backwards. We have already passed consensus DOW level for all of 2013. Risk ON is exactly the wrong advise now, need to be defensive and utilities are always a good defense for downturn. Example - XLU down 17% in 2008 when DOW was lower 50%.

     

    Your argument might hold if there is GDP growth, but none is on the horizon, so your DOW PE will go to way higher than nosebleed, probably a rupture. I think XLU is a much better deal - better yield than S&P and better downside equity risk from the ongoing recession.
    14 Mar 2013, 02:21 PM Reply Like
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